E.g., one person I know, an Employee #1, was shocked to discover that investors only held ~15% of the startup he was at, which he joined just a couple of weeks after incorporation, and the founders held nearly 80%. His equity was IIRC 1%, which he thought was great, and was assuming that the founders had maybe 10% each, with a big option pool and a much-larger investor ownership. Ok, so his numbers didn't change just from learning everyone else's, but he wouldn't have agreed to 1% if he'd known.
It's not the founders' fault. They acted in their own self-interest, and did not volunteer information that would have negatively impacted their position.
But the employee still had a right to be upset, same as any of us would be if we discovered that a teammate for the last several years had been pulling in twice your salary, when you were told "sorry, this is as high as we can go."
This is a super capitalist thing to say. Anyone can understand _why_ the founder acted in their own self interest here, but to say it's not their fault is to just remove all agency from them.
Maybe it's in my best interest to have someone murdered so I can take over their business. Would you say it's not my fault if I did so?
So in one particular cycle people try to gather as much Pie for them as they can.
There fore ultimately one has to be selfish, even if not out of nature, but out of sheer compulsion. These days you have to do these things just not to get walked over.
If you're starving, or need shelter or some other basic to survival, then yes you need to be selfish. After that being selfish is a choice
My point is that startup equity is shit in all but the extremely rare unicorn cases for everyone except the founders and VC's.
I always laugh when I see startups offering microscopic equity while founders horde orders of magnitude more stock acting like what they have done is worth hundreds of times more what your early employees do.
As if anyone can just choose to be working for a company with the right terms, in a position to make a multi-billion dollar sale, and also somehow not get screwed out of what they thought their terms guaranteed.
If you want up be paid $x a fortnight right from the get go then you get a job.
I don't see how the success of people who chose to do A means people that did B got screwed, just because they both worked on the same project. The decisions they made and context of their choosing to work on it were still different things each with their own pros and cons
Unless there was some more to it. Like share /options shenanigans that might not be legally fraud but fraud in spirit. No one seems to be saying that happened here though.
False dichotomy. People join startups (esp. early ones) thinking they have a shot at a significant chunk. But even for the very first employees, the equity numbers are ridiculously small. I don't understand why they sign up for it.
All my friends in startups work damn hard and poured huge chunks of their lives into it, and it has not been fun watching them be offered meager positions post-acquisition, while their founder/CEOs get multi-million paydays.